Understand tax processor integrations

Commerce does not configure taxes, but integrates with tax processors that calculate sales tax in the shopping cart.

This section applies to Open Storefront Framework (OSF) and Storefront Classic.

You must have an active account for the tax processor you choose to integrate with Commerce, including for the built-in Avalara and Vertex integrations.

Commerce automatically uses the tax processor you have enabled to calculate taxes for every order placed on your store. The tax processor calculates sales tax as part of the pricing operation. When the shopping cart is priced with a request to include tax pricing (when the shopper begins the checkout process and when the order is submitted), Commerce sends the order information to the tax processor, which calculates the total tax amount and sends it back to Commerce. The response breaks down the tax into individual components, for example, the total tax amount might include sales tax assessed by both the state and county. Widgets on the checkout page automatically display the tax information.

Commerce is not involved in the settlement process and is not the system of record for any aspect of orders, including taxes. Commerce issues Sales Order calls (instead of Invoice calls) to tax providers to get the tax in a response.

Commerce uses a fallback method for calculating taxes when it cannot connect to your tax processor’s web service in the event of an outage. See Monitor tax processors for details about fallback tax calculation and information about configuring its settings.

If you want to display SKU prices with tax included, for example prices that include VAT, create a price group for those tax-inclusive prices. See Configure Price Groups for more information. If your store uses price groups with tax-inclusive prices, you may need to update your account on your tax processor’s site. For example, if your store uses tax-inclusive prices, you must activate Avalara AvaTax with Global for your AvaTax account.